Healing the Budget

Healing the Budget

Hospitals are (almost) like businesses. They need to generate revenue to stay afloat. How do they do that? More and more they rely on additional revenue streams By Deborah Jeanne Sergeant For many years, hospital and healthcare providers’ reimbursement has been declining. According to Statista, hospital revenue source by payor in March 2020 was Medicare (21.8%), Medicaid (12.8%) and private or self-pay (66.5%). Private/self-pay patients pay 1.4 times the average hospital operating cost and Medicare, at 0.881 and Medicaid at 0.868 pay less. Bottom line: Medicaid and Medicare, which pay low rates, comprise together 34% of visits to hospital, which is a sizable chunk. Only 66% of hospitals’ patient visits are from patients with the higher-paying insurance companies or paying in full out-of-pocket. It’s little wonder hospitals need to seek revenue from other sources. Healthcare Leadership Council reports on its website that the number of doctors not accepting Medicare patients has doubled since 2009. Currently, 81% of family doctors will accept seniors on Medicare, down from 83% a decade ago. The COVID-19 pandemic has exacerbated the issue as providers have poured money into additional PPE and equipment like heart monitors, oxygen monitors and ventilators, setting up additional triage or patient beds

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